Global monetary authorities’ enduring interest in the Aussie dollar is hindering efforts by Australia’s central bank to curb the currency’s strength.
Reserve Bank of Australia Governor Glenn Stevens said that while the central bank has been unconvinced about the effectiveness of trying to drive down the Aussie, he remains “open-minded” on currency intervention.
Japan escalated its campaign to convince investors that the nation’s post-earthquake challenges mean they shouldn’t pile into the yen as a haven from the turmoil over U.S. and European debt.
The pound may fall against Norway’s krone after the Bank of England yesterday signaled that it’s moving closer to asset purchases while Norges Bank said rates should be raised gradually, UBS AG said.
European investors are backing Excalibur Funds Management Pty’s call for the Australian dollar to slump to 75 U.S. cents, reflecting record bets from speculators on declines in the currency.
UBS AG ended a trade recommendation to sell the pound against the dollar after the U.K. currency rose, surpassing the bank’s upper limit to protect against greater losses.
Not since 1999 have currency traders been bullish on the dollar for so long, a sign that the market sees the U.S. resuming its role as the engine of global economic growth.
Australia’s currency fell for a fifth day against the U.S. dollar in the longest losing streak in almost a year after data showed an unexpected decline in retail sales in June.
The euro rose as Asian stocks gained for the first time in three days before reports forecast to show German services and factory output expanded this month.
Australian government bonds rose along with the currency as investors weigh the U.S. central bank’s timing for tapering stimulus that has supported higher- yielding assets globally.
"This latest evidence now suggests that the RBA's patience may be running out, and that the central bank may have finally begun to lean against the wind-- albeit very gently."
- Gareth Berry on Nov 21, 2013
UBS’s Berry Sees `Fractured’ Bet on Japan Inflation